The Saturn Astra was supposed to win over young, import-oriented buyers, but instead, its lack of success has convinced GM it needs to sell off the once-promising brand.
General Motors Corp. has confirmed that it is moving ahead with talks on a possible sale of Saturn Distribution LLC to one of two groups of private investors that have expressed an interest in the dealership network.
The objective of a deal would be to turn Saturn Distribution LLC, which is now wholly owned by GM, into an independent distribution company that would handle vehicles from other manufacturers after its contracts with GM runs out in 2011. GM has said it would continue to supply vehicles to Saturn until then but its decision to sell – or, if necessary, even close – Saturn is now irreversible.
As noted in GM’s viability plan, GM announced it would review the potential spin-off or sale of Saturn and if those options did not prove viable, Saturn’s operations would be wound down over time. Over approximately the past 60 days, a sub-committee of Saturn retailers has been studying the feasibility of the sale or spin-off option, and has identified some parties that are potentially interested in a purchase or spin-off of Saturn.
“We are advised that one of the interested parties is Black Oak Partners (Oklahoma City.) We are not at liberty to discuss any other interested party. With respect to what the eventual outcome concerning Saturn might be with Black Oak or any other interested party, it is simply premature at this time to speculate on what any eventual outcome may be,” GM said in a statement.
Individual Saturn dealers have said they believe it would be feasible to line up other vehicles suppliers. Chinese vehicle manufacturers already work through a variety of distribution companies to export vehicles to Russia and the Middle East.
Another possibility is that an established company, such a Suzuki, could wind up using the Saturn network to expand in the U.S., dealers have said.
The Saturn distribution company currently operates 440 dealerships in the United States but the number is expected to decline as GM continues to restructure.
GM spokesman Tom Wilkinson said GM would not comment on the fate of Hummer. GM put Hummer up for sales last summer and Fritz Henderson, GM’s new chief executive, said he expects to have a final decision on Hummer’s fate soon.
The automaker also is actively seeking a buyer for its Swedish-based Saab division, which will other close or be sold off. Currently, Saab is operating under the Scandinavian equivalent of bankruptcy protection.
Meanwhile, GM is still negotiating both with the United Auto Workers and bond holders to win the concessions it needs to satisfy demands from the White House in order to win a second round of government loans. The outcome of the negotiations is likely to decide whether GM has to file for protection under Chapter 11.